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PART 1 An Overvlew1

1 An Introduction to Information Systems2

Merck-Medco:A Pharmacy for the Future3

Information Concepts5

Data Versus Information5

The Characteristics of Valuable Information6

The Value of Information8

System and Modeling Concepts8

System Components and Concepts9

System Performance and Standards10

System Variables and Parameters11

Modeling a System11

What is an Information System?13

Input,Processing,Output,Feedback14

Manual and Computerized Information Systems15

Computer-Based Information Systems16

Business Information Systems18

Electronic Commerce19

Ethical and Societal Issues:DoubleClick Tempers Marketing with Customer Privacy20

Transaction Processing Systems,Workflow Systems,and ERP21

Management Information and Decision Support Systems23

IS Principles in Action:Home Depot Invests Big in Information Systems26

Special-Purpose Business Information Systems:Artificial Intelligence,Expert Systems,and Virtual Reality26

Systems Development28

Systems Investigation and Analysis28

Systems Design,Implementation,and Maintenance and Review29

Why Learn About Information Systems?29

Information Systems in the Functional Areas of Business30

Computer and Information Systems Literacy30

Information Systems in Industry31

Case 1 States Vie for#1 Technology Rating37

Case 2 Technology in Abundance at the 2002 Winter Olympics38

Case 3 Expert Systems Simplify Life for Automotive Manufacturers39

2 Information Systems in Organizations42

Citibank:Seeking Competitive Advantage with a Major Information System Upgrade43

Organizations and Information Systems44

Organizational Structure47

Organizational Culture and Change50

Reengineering51

Continuous Improvement53

Technology Diffusion,Infusion,and Acceptance54

Total Quality Management54

Outsourcing and Downsizing55

IS Principles in Action：Ford Resorts to Downsizing and In-sourcing56

Competitive Advantage57

Factors That Lead Firms to Seek Competitive Advantage57

Strategic Planning for Competitive Advantage58

Performance-Based Information Systems61

Productivity62

Return on Investment and the Value of Information Systems62

Justifying Information Systems64

Careers in Information Systems64

Roles,Functions,and Careers in the Information Systems Department65

Ethical and Societal Issues:Xylo,Inc.,Creates Work/Life Solutions66

Typical IS Titles and Functions69

Other IS Careers71

Case 1 GE Medical Systems Builds Nation s First All-Digital Hospital76

Case 3 Pressplay:Defining the Internet Music Industry77

Case 2 Delta and Tellabs Seek Higher Return on Investment77

Part 1 World Views Case On-Line Presence Gives Mortgage Broker Global Reach80

PART 2 Information Technology Concepts83

3 Hardware:Input,Processing,and Output Devices84

Celera Genomics:Supercomputers Are Key to Future Profitability85

Computer Systems:Integrating the Power of Technology86

Hardware Components87

Hardware Components in Action88

Processing and Memory Devices:Power,Speed,and Capacity89

Processing Characteristics and Functions89

Memory Characteristics and Functions93

Multiprocessing96

Secondary Storage97

Access Methods97

Devices98

IS Principles in Action:Las Vegas Casinos Cover Their Bets with Highly Reliable Computers101

Input and Output Devices:The Gateway to Computer Systems104

Characteristics and Functionality104

Input Devices105

Output Devices109

Special-Purpose Input and Output Devices111

Computer System Types,Standards,Selecting,and Upgrading112

Computer System Types112

Ethical and Societal Issues:European Weather Forecasters Rely on Blue Storm118

Standards119

Selecting and Upgrading Computer Systems119

Case 1 Australia Experiments with Electronic Voting127

Case 2 Information Systems Support Future Soldiers128

Case 3 Saving Data Center Space with Smaller Servers128

4 Software:Systems and Application Software130

Flextronics:Global Deployment of Software Improves Key Business Process131

An Overview of Software132

Systems Software132

Application Software132

Supporting Individual,Group,and Organizational Goals133

Systems Software134

Operating Systems134

Personal Computer Operating Systems138

Workgroup Operating Systems141

Enterprise Operating Systems142

Consumer Appliance Operating Systems144

Utility Programs145

Application Software146

Types and Functions of Application Software147

Personal Application Software149

Workgroup Application Software155

IS Principles in Action:Honda Uses Collaboration Software to Speed Product Development156

Enterprise Application Software157

Programming Languages159

The Evolution of Programming Languages159

Object-Oriented Programming Languages161

Selecting a Programming Language163

Software Issues and Trends163

Software Bugs163

Open Source Software165

Opensourcing165

Antitrust Issues for Software165

Software Licensing166

Global Software Support167

Software Upgrades167

Ethical and Societal Issues:Oracle Tries to Recover from Pricing Miscue168

Case 1 Infosys Uses Offshore Outsourcing Model to Provide Contract Software174

Case 2 Crystal Flash Opts for Application Service Provider175

Case 3 Microsoft Takes Action to Eliminate Software Bugs175

5 Organizing Data and Information178

Valio:Building Brand Loyalty with Better Decision-Making Data179

Data Management180

The Hierarchy of Data180

Data Entities,Attributes,and Keys181

The Traditional Approach Versus the Database Approach182

Data Modeling and Database Models186

Data Modeling186

Database Models187

Database Management Systems(DBMSs)192

Providing a User View193

Creating and Modifying the Database193

Storing and Retrieving Data195

Manipulating Data and Generating Reports197

Database Administrator198

Popular Database Management Systems199

Selecting a Database Management System199

Database Applications202

Linking the Company Database to the Internet202

Data Warehouses,Data Marts,and Data Mining203

Business Intelligence206

Ethical and Societal Issues:Database Technology Used to Improve Airport Security208

Distributed Databases209

On-Line Analytical Processing(OLAP)210

IS Principles in Action:Sears Competes Using Data Warehouse and OLAP Tools212

Open Database Connectivity(ODBC)212

Object-Relational Database Management Systems213

Case 1 VNU,International Media and Information Company221

Case 2 Wells Fargo Bank Uses Predictive Analysis to Improve Profits221

Case 3 J.Crew Turns to Data Warehousing to Increase On-line Sales222

6 Telecommunications and Networks224

DHL:Implementing a Global Network225

An Overview of Communications Systems226

Communications226

Telecommunications227

Networks228

Channel Bandwidth and Information-Carrying Capacity229

Basic Communications Channel Characteristics229

Telecommunications229

IS Principles in Action:Penske Uses Satellite Communications to Meet Customer Needs233

Connectors235

Devices235

Carriers and Services236

Ethical and Societal Issues:Telemarketers-Please Do Not Call!240

Networks and Distributed Processing242

Basic Processing Strategies242

Network Concepts and Considerations243

Network Types245

Terminal-to-Host,File Server,and Client/Server Systems247

Communications Software and Protocols250

Bridges,Routers,Gateways,and Switches255

Electronic Software and Document Distribution257

Voice Mail257

Linking Personal Computers to Mainframes and Networks257

Telecommunications and Applications257

Telecommuting258

Videoconferencing258

Electronic Data Interchange259

Public Network Services260

Distance Learning260

Specialized Systems and Services261

Case 1 Starbucks Deploys Wireless LANs268

Case 2 Bear,Stearns＆Co.Builds Redundant Telecommunications Network269

Case 3 Networks Support Collaborative Product Design269

7 The Internet,Intranets,and Extranets272

Lands End:Attracting Customers with High-Tech Internet Services273

Use and Functioning of the Internet275

How the Internet Works277

Accessing the Internet278

Internet Service Providers279

Ethical and Societal Issues:The Digital Divide280

Internet services282

E-Mail and Instant Messaging282

Telnet and FTP284

Usenet and Newsgroups284

Chat Rooms286

Internet Phone and Videoconferencing Services286

Content Streaming287

Shopping on the Web287

Web Auctions288

Music,Radio,and Video on the Internet288

Internet Sites in Three Dimensions289

Office on the Web289

Free Software and Services290

Other Internet Services290

The World Wide Web291

Web Browsers293

Search Engines294

Java295

Push Technology297

Business Uses of the Web297

Developing Web Content298

Intranets and Extranets299

IS Principles in Action:Web Services Take the Web to a New level300

Management Issues302

Service and Speed Issues302

Net Issues302

Privacy,Fraud,Security,and Unauthorized Internet Sites303

Case 1 Google Uses New Approach to Web Advertising311

Case 2 The Web in Three Dimensions312

Case 3 Hummingbird Provides Leading Enterprise Information Portal(EIP)Solutions313

Part 2 World Views Case From Railway Station to Whaleway Station315

PART 3 Business Information Systems317

8 Electronic Commerce318

Tesco:Grocer Implements Successful E-Commerce Business Model319

An Introduction to Electronic Commerce320

Multistage Model for E-Commerce321

Ethical and Societal Issues:PayPal Service Runs into Start-Up Problems324

E-Commerce Challenges325

The E-Commerce Supply Chain326

Business to Business(B2B)328

Business to Consumer(B2C)328

Global E-Commerce329

Consumer to Consumer(C2C)329

E-Commerce Applications330

Retail and Wholesale330

Manufacturing331

Marketing333

Investment and Finance334

Auctions336

Technology Infrastructure336

Hardware337

Web Server Software337

E-Commerce Software339

E-Commerce Transaction Processing340

Network and Packet Switching340

Secure Sockets Layer341

Electronic Payment Systems341

Electronic Cash342

Electronic Wallets342

Smart,Credit,Charge,and Debit Cards343

Threats to E-Commerce344

E-commerce Incidents344

Theft of Intellectual Property344

IS Principles in Action:Visa Implements Smart Card Technology345

Fraud346

Invasion of Consumer Privacy347

Strategies for Successful E-Commerce349

Developing an Effective Web Presence349

Putting Up a Web Site350

Building Traffic to Your Web Site351

Maintaining and Improving Your Web Site351

Case 2 Lowe s Fights Tooth and Nail to Be No.1358

Case 1 DaimlerChrysler Joins Covisint Exchange358

Case 3 Port of Seattle Turns to E-Commerce359

9 Transaction Processing and Enterprise Resource Planning Systems362

Wal-Mart and Kmart:Transaction Processing Systems Distinguish Major Retailers363

An Overview of Transaction Processing Systems364

Traditional Transaction Processing Methods and Objectives365

IS Principles in Action:Financial Industry Considers Move to Trade Plus One Day(T+1)368

Transaction Processing Activities371

Control and Management Issues374

Traditional Transaction Processing Applications376

Order Processing Systems376

Purchasing Systems384

Accounting Systems388

International Issues392

An Overview of Enterprise Resource Planning395

Enterprise Resource Planning395

Advantages and Disadvantages of ERP396

Ethical and Societal Issues:Nike Stumbles Implementing ERP399

Example of an ERP System399

Case 1 MetLife Implements CRM407

Case 2 Verizon Restores Telecommunications Service in Wake of 9/11 Disaster408

Case 3 Upgrade Required for Sabre Transaction Processing Systems408

10 Information and Decision Support Systems410

Shearman＆Sterling:Using Intormation Systems to Harness the Knowledge of the Firm411

Decision Making and Problem Solving412

Decision Making as a Component of Problem Solving412

Programmed Versus Nonprogrammed Decisions413

Optimization,Satisficing,and Heuristic Approaches414

Inputs to a Management Information System415

An Overview of Management Information Systems415

Management Information Systems in Perspective415

Outputs of a Management Information System416

Characteristics of a Management Information System419

Ethical and Societal Issues:The Energy-Conscious MIS420

Functional Aspects of the MIS421

Financial Management Information Systems421

Manufacturing Management Information Systems424

Marketing Management Information Systems429

Human Resource Management Information Systems432

Other Management Information Systems435

An Overview of Decision Support Systems436

IS Principles in Action:Geographic Information System Saves Trees437

Characteristics of a Decision Support System438

Capabilities of a Decision Support System439

A Comparison of DSS and MIS440

Components of a Decision Support System441

The Database442

The Model Base443

The Dialogue Manager443

Group Decision Support Systems443

Characteristics of a GDSS That Enhance Decision Making444

GDSS Software446

GDSS Alternatives446

Executive Support Systems448

Executive Support Systems in Perspective448

Capabilities of Executive Support Systems449

Case 1 Marketing MIS Gives Entertainment UK the Upper Hand456

Case 2 CampusShip Provides a Centralized Shipping System for Distributed Organizations457

Case 3 Storebrand Uses WebService to Automate Data Entry458

11 Specialized Business Information Svstems:Artificial Intelligence,Expert Systems,Virtual Reality,and Other Specialized Systems460

Artificial Life,Inc.:Intelligent Bots:The New Citizens of Cyberspace461

An Overview of Artificial Intelligence462

Artificial Intelligence in Perspective462

The Nature of Intelligence462

The Difference between Natural and Artificial Intelligence464

The Major Branches of Artificial Intelligence464

Ethical and Societal Issues Cyc:The System That Is an Expert at Common Sense466

An overview of Expert Systems470

Characteristics of an Expert System470

Capabilities of Expert Systems472

When to Use Expert Systems473

Components of Expert Systems473

Expert Systems Development477

Applications of Expert Systems and Artificial Intelligence481

IS Principles in Action:Beating Wall Street with an Intelligent Supercomputer482

Integrating Expert Systems484

Virtual Reality484

Interface Devices484

Forms of Virtual Reality485

Useful Applications486

Other Specialized Systems488

Case 1 PixAround.com Brings 3-D Worlds to Your Desktop494

Case 2 Transco Uses Gensym s Expert System to Control Natural Gas Flow495

Case 3 IBM s eLiza:Computer Systems That Care for Themselves496

Part 3 World Views Cases A Happy Valentine s Day in Virtual China498

Staff Rostering System at the Hospital Authority of Hong Kong500

PART 4 Systems Development503

12 Systems Investigation and Analysis504

Comcast Corporation:The Challenges of Providing Broadband Internet Access505

An Overview of Systems Development506

Participants in Systems Development506

Initiating Systems Development508

Information Systems Planning and Aligning Corporate and IS Goals509

IS Principles in Action:British Telecommunications Adopts On-Line Account Management and Billing System511

Establishing Objectives for Systems Development513

Systems Development and E-Commerce514

Trends in Systems Development and Enterprise Resource Planning515

Systems Development Life Cycles516

The Traditional Systems Development Life Cycle517

Prototyping518

Rapid Application Development,Agile Development,and Joint Application Development519

Outsourcing522

The End-User Systems Development Life Cycle522

Factors Affecting Systems Development Success524

Degree of Change524

Ethical and Societal Issues:Information Systems Running Amok?525

Quality and Standards526

The Capability Maturity Model(CMM)527

Use of Project Management Tools528

Use of Computer-Aided Software Engineering(CASE)Tools530

Object-Oriented Systems Development531

Systems Investigation532

Initiating Systems Investigation532

Participants in Systems Investigation533

Feasibility Analysis533

The Systems Investigation Report535

Object-Oriented Systems Investigation535

Systems Analysis536

General Considerations536

Participants in Systems Analysis537

Data Collection537

Data Analysis539

Requirements Analysis541

Object-Oriented Systems Analysis543

The Systems Analysis Report544

Case 1 General Motors Reduces Dealer Costs with Procurement System552

Case 2 Staples Provides Convenience with In-Store Kiosks553

Case 3 Wesco Distribution Adds Links to the Supply Chain554

13 Systems Design,Implementation,Maintenance,and Review556

FedEx Corp.:Simplitying International Shipping557

Logical and Physical Design559

Systems Design559

Special System Design Considerations562

Object-Oriented Design564

Emergency Alternate Procedures and Disaster Recovery565

Systems Controls569

The Importance of Vendor Support570

Generating Systems Design Alternatives570

Evaluating and Selecting a System Design571

Evaluation Techniques573

Freezing Design Specifications575

The Contract576

The Design Report576

Systems Implementation577

Acquiring Hardware from an Information Systems Vendor577

Externally Developed Software579

Acquiring Software:Make or Buy?579

Ethical and Societal Issues:Open Source vs.Proprietary Software580

In-House-Developed Software581

Tools and Techniques for Software Development584

Acquiring Database and Telecommunications Systems587

User Preparation587

IS Personnel:Hiring and Training588

Site Preparation589

Data Preparation589

Installation589

Testing589

Start-up590

User Acceptance591

Types of Maintenance592

Reasons for Maintenance592

Systems Maintenance592

IS Principles in Action:Supply Chain Management Software Delivers-Despite Resistance593

The Request for Maintenance Form593

Performing Maintenance594

The Financial Implications of Maintenance594

The Relationship Between Maintenance and Design595

Systems Review596

Types of Review Procedures596

Factors to Consider During Systems Review597

System Performance Measurement597

Case 1 Lenox Revamps Web Site for Improved Customer Satisfaction605

Case 2 Corning Display Technologies Sheds New Light on the Systems Deveiopment Process606

Case 3 State Street Corp.Speeds Financial Trading with State-of-the-Art Financial Transaction Management System606

Part 4 World Views Cases Event-Driven Review of the University of Nairobi s Student Management Information System609

Song Book Music610

PART 5 Information Systems In Business and Soclety613

14 Security,Privacy,and Ethical Issues in Information Systems and the Internet614

U.S.Government:Recommending Strong Medicine to Combat Cybercrime615

Computer Waste and Mistakes616

Computer Waste616

Computer-Related Mistakes617

Preventing Computer-Related Waste and Mistakes617

Computer Crime620

The Computer as a Tool to Commit Crime622

The Computer as the Object of Crime624

IS Principles in Action:Building Alliances to Combat Software Piracy629

Preventing Computer-Related Crime631

Privacy637

Privacy Issues638

Ethical and Societal Issues:Personal Data Sold to Law Enforcement Agencies639

Fairness in Information Use641

Federal Privacy Laws and Regulations641

State Privacy Laws and Regulations644

Corporate Privacy Policies644

Individual Efforts to Protect Privacy644

The Work Environment645

Health Concerns645

Avoiding Health and Environmental Problems647

Ethical Issues in Information Systems648

Case 1 The Role of the CERT/CC655

Case 2 Australia Struggles to Implement Internet Laws656

Case 3 E-Mail Monitoring-A Necessary Evil?656

Glossary659

Subject Index673

Name and Company Index691